How will you design a distribution channel?
Answer: Design a distribution channel: To design a channel that satisfy customers and outdo competition, an organizational approach is required. We suggest a sequence of four decisions;
1. Specify the role of distribution: A channel strategy should be designed within the context of the entire marketing mix. First, the firm’s marketing objectives are reviewed. Next, the roles assigned to product, price, and promotion are specified.
2. Select the type of channel: Once distribution’s role in the overall marketing program has been agreed on, the most suitable type of channel for the company’s product must be determined. At this point in the sequence, a firm needs to decide whether middlemen will be used in its channel and if so, which types of middlemen.
3. Determine intensity of distribution: The next decision relates to intensity of distribution—that is, the number of middlemen used at the wholesale and retail levels in a particular territory.
4. Choose specific channel members: The last decision concerns the selection of specific firms to distribute the product. Sometimes, a company—often a small one trying to market a new product—has little choice regarding which channel members to use.